April 27, 2012

Nuclear Expansion To Create Mining, Construction Jobs

Published on Friday April 27 2012 (AEST)
Energy Minister Dipuo Peters discusses the benefits of developing nuclear power generation in South Africa at the National Union of Mineworkers' Nuclear Energy Workshop this week.

 Expanding South Africa’s nuclear power industry would boost job creation, particularly in the uranium mining and construction sectors, Energy Minister Dipuo Peters said at the National Union of Mineworkers' (NUM’s) Nuclear Energy Workshop, in Midrand, on Monday. 

The Minister was reacting to concerns raised by the NUM that a focus on nuclear power would lead to the systematic phasing out of coal, which is a key job-creating industry, as the country’s main energy source. South Africa plans to generate 9.6 GW of electricity from nuclear energy by 2030. The Integrated Resources Plan for electricity also calls for 6.3 GW of new base-load coal capacity. 

Peters told the NUM forum that localisation and job creation were central to the country’s new nuclear build programme. Not only would nuclear expansion create mining and construction jobs, it would also open opportunities in the scientific sphere. "We have sufficient local capacity in terms of scientists and scientific companies and we can capitalise from our own intellectual capacity instead of sourcing from abroad," she pointed out. 

The Minister added that partnerships with local industry players and nuclear-intensive countries, such as Japan, would be important in developing a safe and efficient nuclear sector in South Africa. 

"We must engage with countries where nuclear is primary to power generation and by learning from events such as Fukushima, we can safely and successfully strengthen our nuclear capacity.” 

April 20, 2012

Denison - Energy Fuels Merger Shakes Uranium Landscape

Published on Friday April 20 2012 (AEST)

Energy Fuels Corp., the company that wants to build a uranium mill in Montrose County, announced a merger this week that will make it the dominant U.S. uranium company.

The merger with Denison Mines Corp. also gives Energy Fuels an operating uranium mill in Utah and raises the prospect that it might not build the Montrose County mill.

Denver-based Energy Fuels wants to build the Piñon Ridge uranium mill in the Paradox Valley, outside the town of Naturita. It would be the first new uranium mill in the United States in 30 years.

Colorado’s health department approved Energy Fuels’ permit to build the Piñon Ridge mill, but opponents have sued to stop it.

The company has spent $11 million on getting the mill permitted and is committed to securing approval to build it, Energy Fuels CEO Steve Antony said on a Tuesday conference call.

But whether Piñon Ridge actually gets built is another question altogether.

“We intend to complete the defense of the license, and at that time, depending on market conditions, any kind of decisions to go forward with actual construction will most likely be market-driven and based on market opportunity,” Antony said.

A company spokesman said Thursday that hedging on Piñon Ridge is nothing new.

“That’s been the plan all along. Nothing’s really changed,” said Curtis Moore, director of communications and legal affairs.

Jennifer Thurston of Sheep Mountain Alliance, which sued the state to overturn the mill permit, said this is the first time she’s heard Energy Fuels executives express hesitation about Piñon Ridge.

“For people who have been skeptical about the mill, it’s been a question of market economics all along,” Thurston said.

Denison runs the country’s only operating uranium mill, the White Mesa mill near Blanding, Utah. The merger gives Energy Fuels access to a mill right away, instead of waiting for the regulatory and legal process to be settled with Piñon Ridge, Moore said.

Denison milled only ore from its own mines at the White Mesa mill, so Energy Fuels did not have a place to process uranium from the mines it owns before the merger.

But there still might be an economic reason to build the Montrose County mill.

“We believe there’s plenty of uranium ore on the Colorado Plateau to support two mills,” Moore said.

Energy Fuels plans to acquire Denison in a stock deal worth about $107 million based on Monday’s share price.

The deal is set to close June 30, Moore said.

Denison shareholders, led by Korea Electric Power Corp., will own about two-thirds of Energy Fuels stock once the deal is completed.

Denison lost $71 million last year as the uranium market plunged after the power plant meltdown in Fukushima, Japan.

Energy Fuels stock jumped 14 percent overnight Monday after the merger announcement. However, Energy Fuels stock has fallen sharply over the last year. It was trading Thursday at 30 Canadian cents on the Toronto Stock Exchange, down from a high of 58 cents a share in April 2011.

Earlier this month, Energy Fuels completed its merger with Titan Uranium, which nearly tripled the Denver company’s uranium reserves. The purchase of Titan gave Energy Fuels the “critical mass” it needed to acquire Denison, Moore said.

Energy Fuels currently has 25 to 30 employees, most of whom are based in Denver. With the merger, about 400 Denison employees – mill workers, truck drivers, mine operators and more – will join Energy Fuels.

April 1, 2012

Uranium Explorers May Never Be Cheaper

Published on Sunday April 01 2012 (AEST)

If you have any plans to enlarge your uranium interests - and you have either ready cash or still know a bank that is lending - this may be the time to go about it. Uranium spot prices continue to be subdued: they remained unchanged this week at $52/lb.

For all the hand-wringing in Japan and Western Europe over nuclear power, the nuclear trajectory is upward. In terms of gigawatt hours, China’s reactor capacity is going to rise from about 10GW 2008 to about 120GW by 2035; India will rise from about 5GW now to 25GW in 2035, Russia from 25GW to 50GW, while projections are that even Europe and the Americas will see increases over the next 23 years. (The numbers are not exact - they are taken from a bar chart - but they at least give some idea of the proportion of growth.

Today the Namibian government has approved the possible $2.2 billion takeover of Australian-listed Extract Resources which owns the Husab uranium mine in that country. This mine is shaping up to be the fourth largest uranium operation in the world. Such a takeover is the expected consequence from the currently occurring acquisition of London-listed Kalahari Minerals, which owns 42.7 per cent of Extract Resources. The buyer is China Guangdong Nuclear Power Corp - which has just started placing orders in Australia for uranium shipments in Shanghai through its Australian owned Energy Metals (which controls the advanced Biglyri uranium deposit in the Northern Terrtory).

We have recently seen the acquisition of Canada’s Hathor Exploration. This has already led to speculation that Hathor’s buyer, Rio Tinto, might next turn its attention to another Canadian company, Fission Energy Corp, which is due to begin drilling at its neighbouring Waterbury Lake project in Canada. Analysts have made the point that the Fukushima disaster, the German retreat from nuclear power, and not to forget the general equity mark weakness, have made uranium stock prices cheap - and companies available at potentially bargain basement prices.

There will also be opportunities for those seeking uranium security. We have just seen Korea Resources Corp team up with Australian junior East Africa Resources to help finance the Mkuju South uranium project in Tanzania. (Incidentally, a Seoul-based utility, Korea Electric Power, is in joint venture with Fission Energy mentioned above.)

There’s also another point in parallel to one I reported about yesterday on our sister blog, Potashblog.com in relation to fertilizer producers, in that during times of financial stress it will be the global diversified miners who have the resources to buy when companies are priced cheaply. Of course, in the case of uranium (and most resources) the Chinese have seemingly limitless amounts of foreign reserves with which to snap up bargains.

In Rio’s case, it is probably still regretting the financial crisis that forced it to sell a number of projects including its potash interests. With uranium, it will also be looking for replacement capacity for the eventual wind down of its Ranger mine in Australia and Rossing mine in Namibia - apart from any potential it may see in actually expanding its uranium operations. (By the way, this is supposition: I may hold shares in Rio Tinto - disclosure thus made - but know nothing more than any other outsider.)

But it does seem clear that anyone with the deep pockets and an urge to expand uranium capacity will be looking to act now rather for uranium prices to tick up again - as they will when more capacity nears completion and Fukushima memories fade - and Europe perhaps sees the folly of its anti-nuclear way.